Basis (or cost basis), as used in United States tax law, is the original cost of property, adjusted for factors such as depreciation. When property is sold, the taxpayer pays/(saves) taxes on a capital gain/(loss) that equals the amount realized on the sale minus the sold property's basis. Typically, capital gains tax is due only when an asset is sold. However the rules for this are very complicated. If tax is paid because the value has increased, the new value will be the cost basis for any future tax.